Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154189
Authors: 
Jobst, Clemens
Ugolini, Stefano
Year of Publication: 
2014
Series/Report no.: 
ECB Working Paper 1756
Abstract: 
Money market structures shape monetary policy design, but the way central banks perform their operations also has an impact on the evolution of money markets. This is important, because microeconomic differences in the way the same macroeconomic policy is implemented may be non-neutral. In this paper, we take a panel approach in order to investigate both directions of causality. Thanks to three newly-collected datasets covering ten countries over two centuries, we ask (1) where, (2) how, and (3) with what results interaction between money markets and central banks has taken place. Our findings allow establishing a periodization singling out phases of convergence and divergence. They also suggest that exogenous factors – by changing both money market structures and monetary policy targets – may impact coevolution from both directions. This makes sensible theoretical treatment of the interaction between central bank policy and market structures a particularly complex endeavor.
Subjects: 
Central Banking
monetary policy implementation
money markets
JEL: 
E52
G15
N20
ISBN: 
978-92-899-1496-3
Document Type: 
Working Paper

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